Cape founder: US cellular networks are completely compromised — Salt Typhoon, SIM swaps, and how to fix it

anyway, welcome to the studio, John. Good to have you here. How are you doing? Hey guys, happy to be here. I'm doing great. Thanks so much for joining. Would you mind kicking us off with a little bit of introduction of yourself and the company maybe to get us started? Yeah, you bet.

I um I'm John Doyle, founder and CEO of Cape, is America's privacy first mobile network. Mhm. Uh, two sentences on my background because it explains how I came to start this company. I started my career in the Army Special Forces. I was a communication sergeant on a fifth special forces group. Um, went to Palunteer.

I was there for nine years and at Palunteer I started in technical roles. I wound up running the national security business for five years and that's where I learned about this whole, you know, PhD field of study worth of vulnerabilities that exist on the global cellular network. Interesting.

and I'm really passionate about solving them and so I started Cape in 2022 uh to get after that problem. What is the biggest like uh concrete risk to the cellular network? Is it is it like Well, I would just start at a at a higher level. Is it how unsecure is the average cellular network completely?

And you know we saw um if you remember during the the last campaign the story came out about JD Vance's phone calls being listened to. Oh yeah. Right.

And and it um that kind of came and went as as these stories do, but it it snowballed into the story about Salt Typhoon, which the headline of that story is China has just explicitly and completely infiltrated all the major telos in the United States. Wow. Which is pretty bad.

But even before you get there, there all these they're really features that are baked into the protocols that run the network. uh they're there for good reason, but in the hands of malicious actors, um some really bad effects can be drawn out of them.

And so, you know, we can get deep in the technical weeds if you want to, but basically the whole thing is blown. And it's problematic because we are entirely reliant and kind of fundamentally reliant on the cellular network. Yeah. What's a bigger risk right now? Espionage or sabotage? That's a really good question.

Um I'm going to say espionage. um because it is being like um it's absolutely happening right now. The Vance story is a perfect example of that, right? Yeah. Just listening to the future vice president's phone calls.

Although the sabotage question is interesting um I know you guys want to talk about or have been talking about spiderweb a bunch and and the um the drone attacks.

One of the really interesting features of that story of course from our perspective is the fact that the drones were piloted on um using cellular commercial cellular connection. Totally. uh which is really interesting to us in a bunch of ways.

But importantly and it came out a bunch in the reporting when people start to think about countermeasures and you know how would we how do we guard against these attacks in the future? One option that gets taken off the the table almost immediately is turning off the cellular network, right?

That has like disastrous consequences, right? Because what if someone needs to call 911 and they can't? Something like that. You're you're going to wind up impacts when there's when there's an AT&T outage. Yeah. Um yeah, stuff grind, right? Yeah. Yeah.

I mean, we saw it yesterday with just like Cloudflare outage and it was very disruptive. Um talk to me about uh how you actually go about building a new network.

Are you able to uh solve the problems that you're trying to solve just by pigging back piggybacking on the existing physical hardware or is this a crazy capex problem that you're we're going to see you raising a trillion dollars in debt and stuff? Uh you could probably do that based on your background.

Uh but I'm always interested to know where you think like the right problem to solve is. Yeah, it's a great question and we didn't know the answer to it when we started the company. Uh thankfully it turns out you don't need to build the towers. You don't need to own the the antennas or the spectrum. Got it.

Our approach is we own all the software that runs the network. So we control authentication, billing, call routing, messaging, all the important stuff.

And we've done pretty extensive uh red teaming and testing especially with government partners um and proven out that if you own all the software you can actually make a lot of progress against the problem. Very cool.

So uh when I see one of those cell phone towers that might not be a Verizon tower specifically that might be owned by a different company that then is like leasing or running software for Verizon and AT&T within the same kind of like you could think of it almost like a multi-tenant data center.

Is that the right mental model when I see a cell phone tower? Yeah. And that's a great um it's a really good observation and it turns out to be true. Okay. The carriers, you know, the carriers, what the carriers own is Spectrum, right?

What Verizon owns is an amazing amount of spectrum that's super expensive and they administer it. They don't even, you're right, they don't even own the towers most of the time.

like American Tower or some other company builds the tower oftentimes puts the radio on there or um the carriers will sign an agreement with Nokia or Ericson to put the antennas up there and often times the carriers don't actually run the radios. They outsource that to Nokia and Ericen.

Um and so it has they they have sort of assumed the system integrator role. Um and I think my personal opinion is that that has serious security implications has led to some of the um the problem that we find ourselves in. Sure. Can you get me up to speed on 5G?

I remember the drama around Huawei and they had built 5G towers that we were not going to buy. I also heard someone mention offhand that America doesn't really have 5G. We have like fake 5G or something. Is there like I Yeah. Is it marketing? Oh, you're like don't talk about it. Right. Yeah. Okay.

So, there's two things there. Um, first you're like you're you're teeing up one of my favorite history lessons which is 20 20 years or so ago, 23 years ago, China made the strategic decision to capture as much footprint on the global cellular network as possible.

And the way that they achieved that was by pumping billions of dollars of subsidy into Huawei so that Huawei could run around the world and sell antennas and also core software, the software that runs the network at, you know, half or less of the price of any of their competitors.

And so it became really attractive and everyone went out and bought Huawei gear. And the result was that um China now owns still not in the US so much anymore but around the world you know a huge percentage of the footprint on the network.

At almost exactly the same time the US and it's not um obviously a different kind of government so it wasn't like a centrallymade decision but US telecom started outsourcing and offshoring all of the technical um aspects of running the business.

So you know the core software now is built by Nokia or Ericson which are in Europe. Um and very little of that capacity exists within the United States.

So while China's making all these really deep and recurring investments in the infrastructure, the US is really kind of divesting and just becoming these system integrator uh spectrum managers and that's how we find ourselves in this imbalance now.

And that when people talk about the race for 5G and how is the US positioned with respect to China, I think it's a little bit of a misnomer to say it's 5G because they're not talking about um when when 5G first started to to um get buzzy, the use cases were always like a heart surgeon in Boston is going to be doing surgery in Africa, right?

Because of the low low latency protocols and that stuff is cool, but that's not like how we're behind China. How we're really behind China is just in how much footprint do we own and how much access, how much control do we have over the network?

And that's actually agnostic of which generation um or it's independent of what generation we're on. The other So, and then are we really on 5G is such a good question. There's like I think about it mostly from a bandwidth perspective.

Like I I be I became able to stream HD video at like retina resolution and I really don't have a daily use case that's goes beyond that in terms of bandwidth needs, right?

And so as long as but but every once in a while I notice if I'm about to take off on a plane and I know I want to download a movie right before the difference between fast for downloading like a full gig in 2 minutes and and 20 minutes is material. Uh and so that's where I would think 5G would help.

But I've also heard about like streaming video games obviously 4K stuff. But I I I I don't feel the pain that much that I'm not you know I'm not a single issue voter on the topic. But I am I am curious. You're like I mean that observation is a threat to the entire like tele like like 3G to 4G was way better, right?

Oh, totally. It was it was night and day. Yeah. Better more secure and 4G to 5G was arguably better, although not entirely because like 5G connection drains the battery on your phone a lot faster. Interesting. There's some trade-offs there where LTE times 4G is actually like a better option in some in some.

But beyond that, like the hurry up and download a movie use case, yeah, there's kind of nothing left. And so there's a big you know, shrug in the industry.

They're people are kind of waving their hands at AI like, well, we're going to do AI and that'll, you know, that'll change everything, but I don't know that that that um that comes into it. Everything's an S-curve. It's all sigmoid. We saw band mobile bandwidth growing exponentially.

Everyone was like, you're going to be able to download 10 xabytes in two seconds. And in fact, it was a sigmoid function like it always is. I think and like I think you nailed the use case. It's like as long as I can stream Netflix at maximum resolution, I'm done.

like that's who is the um who is the the core customer that you're going after? Is it people in important positions? You know, politicians, CEOs, etc. Just JD Vance just JD1 billion. You should be able to get a $1 billion ARR contract.

No, but I think but when I when I think about the broad consumer market, people say they want privacy, but in a lot of people just want $20 instead of $30, right? Yeah. Yeah. I mean, both of those both those consumers exist in the market. There are a lot of people.

Mint Mobile perfected the like how cheap can you offer a sale plan, right? And like and they nailed it. $20 a month turns out to be the the answer, right? Ryan Reynolds undefeated. Undefeated. I love the answer. Undefeated. When you have unlimited free marketing for Reynolds, win any game. Um, so, okay. So, yeah.

So, who like who are we trying to solve problems for? I mean, I like my background is in special operations. I am deeply passionate about um the fact that cellular phones have been a part of the battlefield for as long as we've had cellular phones and they are increasingly not decreasingly so over time.

We saw this in Ukraine like everyone the entire Ukrainian war is fought on the mobile network uh at least communications aspects of it. Um and I'm deeply passionate about building technology that keeps people doing that work safe, right? I think that's like a really important mission and I love it.

Um, and that is where we started when we were thinking about the product and starting to like build early versions and build early features. That was the market. But we always had in mind and I in in my early life I was a special operations soldier.

In my later life I'm a parent and like and I even in my sort of relatively mundane parental, you know, mid-40s existence. I I have worries about how reliant I am on my cell phone and the trade-offs I'm making and things like SIM swaps. If you know what SIM swaps are, that's a huge problem, right?

And um you need you have to build technical solutions to problems like that. Um and I have also like a general sense of indignation that um if I want to be a a subscriber to any traditional telco, I give away all of my personal information and then they lose it like clockwork four to five times a year. They really do.

They're giving it away internet. Like it it doesn't have to be that way and it shouldn't be that way. Well, thank you for your service both in the military and as a father. It's very important. Um we got to get you Ryan Gosling. I think I think you know Ryan Reynolds with Min Mobile. We get you Ryan Gosling.

There's something there. There's something there. This is fantastic. Well, now you're you're our chief mobile correspondent now. Yeah. Um Uh yeah. I mean, do you have anything else or should we let him go? No, this was great.

I mean, seriously, we I think I think there's going to be I'm sure there'll be more stories this year. Give some some deeper insight, but we'll let you get back to it. Important work. Have a great rest of your day. Cheers. We'll talk to you soon. Uh, let's quickly tell you about wander. Find your happy place.

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Are your hands aching? Are your fingers breaking? I'm sweating. Oh, sweating. Okay. Well, you're an hour and a half time. But if you're sweating a lot, you should try these Apple decks. Apple flavored course for electrolytes. Let's get him Let's get him a Let's get him a cup. Let's get him a cup.

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" Anyway, we have our next guest in the studio, Emily Sunberg, the writer of the fantastic Feed Me, the daily newsletter about the spirit of enterprise. Really? Isn't that an